Webcaster royalties: The central issue — whether Congress should change the method by which webcaster royalties are calculated — hasn’t yet been introduced in the form of a bill, though Rep. Jason Chaffetz, R-Utah, plans to reintroduce one in the fall. The previous bill from last year proposed that the webcasting royalty standard be the same as those of satellite and cable radio, which both pay a lower rate. The House Judiciary Committee, where the bill would be introduced, operates on reaching a consensus before releasing proposals for vote in the main House, suggesting a slow-moving process. Will the sense of urgency created by the upcoming 2014 rate hearings by the Copyright Royalty Board to set webcasting royalties push lawmakers to act faster?
FM radio performance rights: Rep. Mel Watts, D-N.C., announced during a congressional hearing in July that he’ll introduce a bill forcing U.S. broadcasters to pay performance royalties. The National Assn. of Broadcasters, which has successfully squashed similar efforts in prior years, immediately objected, saying the proposal was “a tax that would kill jobs at America’s hometown radio stations.” Rights holders including SoundExchange and the RIAA are hoping to leverage the webcasting issue to compel broadcasters to pay performance royalties. While Pandora also wants this, bringing in the NAB will undoubtedly bog down its agenda and lead to a potential standoff.
Copyright overhaul: The debate is further complicated by the desires of the chairman of the House Judiciary Committee and the U.S. Register of Copyrights to revamp copyright law in the age of digital media. This risks pulling in further interest groups — like movie studios, book publishers, TV show producers, online video creators and photographers — each having complex, sector-specific digital copyright issues that can overshadow the concerns of the music industry. The chairman, Rep. Bob Goodlatte, R-Va., has already held at least three hearings on the matter — in November 2012 and twice this year in March and July. The call for a broad copyright reform got a boost from Register of Copyrights Maria A. Pallante, who testified in March that the statute could use a “comprehensive revision.” The last time Congress updated copyrights, the effort took more than six years and yielded the Digital Millennium Copyright Act of 1998.
Key Washington Influencers
Rep. Jason Chaffetz: A member of the House Judiciary Committee, Chaffetz has been Pandora’s most vocal champion in the House. The Republican Utah lawmaker has said he plans to reintroduce a new version of the controversial Internet Radio Fairness Act this fall.
Rep. Bob Goodlatte: As chairman of the House Judiciary Committee, the Republican representative from Virginia has made copyright reform one of his priorities, and any webcaster proposal must pass through his committee before it reaches the House floor. Goodlatte has remained neutral on the debate, in character with his preferred role as arbiter.
Mike Huppe: Head of SoundExchange, which collects digital radio and other royalties and distributes them to artists. Huppe’s organization also funds the MusicFirst Coalition, whose members include the American Assn. of Independent Music, RIAA, SAG-AFTRA, AFM and the Recording Academy. The coalition, headed by Ted Kalo, vehemently opposes Pandora’s proposal, but sides with the company in calling for broadcasters to pay performance rights royalties.
Maria Pallante: The U.S. Register of Copyrights has made a persuasive plea to lawmakers to revamp the nation’s copyright laws in a way that would reflect the manner in which all digital media is consumed. Among other areas, she has targeted music copyrights, in particular the lack of a radio performance rights royalty, as ripe for reform.
Cary Sherman: As head of the RIAA, Sherman has taken the lead for labels lobbying against Pandora’s proposal. Having underestimated the Internet radio company in the last legislative battle four years ago, the RIAA is now preparing a more aggressive ground assault, recruiting sympathetic artists to help recruit lawmakers on the record companies’ behalf.
Gordon Smith: A former U.S. senator and current president of the NAB, Smith knows his way around Capitol Hill. Along with NAB head of government relations Nelly Cole, Smith supports Pandora’s efforts but opposes proposals calling for broadcasters to pay for performance royalties. NAB’s power stems from local radio station members, which can reach key constituents during elections.
Rep. Mel Watt: An advocate for artists, Watt has vowed to introduce legislation this fall that would require terrestrial radio broadcasters to pay performance royalties. The North Carolina Democrat has also opposed Pandora’s request to change the method for calculating webcaster royalties.
Tim Westergren: The founder/chief creative officer of Pandora has shown he’s capable of whipping up grass-roots support, flooding lawmakers with calls, emails and letters during the last legislative round in 2009.